23rd June 2016
The future of autos is already here, and like traffic congestion, it’s just unevenly distributed1, so here are a few reflections, perspectives and points to note from a recent trip to Berlin for a future of mobility workshop with BIC associates Hackmasters. We’re on the cusp of an artificially intelligent, autonomous driving revolution with everything from AI to Generation-Z about to impact our digital ecosystem, with the potential to make driving smarter, safer and create opportunities in a new economic race ( but without a race condition.)
1. Just exactly what are the Generation-Z post-millennial attitudes to cars? No-one is absolutely sure about how Gen-Z will feel about the concept of car ownership. Given the sharing economy and the on-demand nature of say Uber and AirBnB, plus the economic impact of poorer parents and the flight of wealth across the generations these groups may have a completely different view of cars (and car brands). Historically, cars were status symbols and ownership was a way of demonstrating status (50s in the US, 60s, 70s in Europe, today in China). However, the Gen-Zs, those just getting to the stage where they are potentially in the market, may eschew traditional car ownership in favour of rentals, sharing and cab apps. Indeed, if self-driving cars (Levels 0-5 to completely autonomous) become the norm, then the concept of “driving” will change. Will people even want to take the driving test and learn to drive in the West? Will people be able to afford cars at all? Will there be any room on the roads anyway?
2. And how will life-stage change this? Research lacks insight and understanding on the attitudes of Gen-Z to car ownership 2 as they, in turn, grow older. Indeed it’s contradictory...perhaps they’re not so interested now but a point made frequently was that the arrival of kids in a household changed everything and suddenly there’s a need for picking up and dropping off (though dense urban and country may be different). Importantly, no one knows whether this will drive fractional ownership, and what will be the reactions from car rental companies to this opportunity. Would manufacturers move to a subscription-based cradle-to-grave model to keep you within the brand? That would mean you don’t ever own a car, you just rent it and swap it out when you need to go on holiday with the kids in a bigger car...
3. Autonomous vehicles are a question of when, not if. There are several pieces of research that show they’re already safer for driving in the USA/Western Europe than people alone. The BIG question is attitudes to the issue and liability in the event of an accident. No manufacturer wants to be the subject of a class action or to be the first AI that accidentally runs over child A to avoid running over child B. The ethical “who’s driving dilemma,” is it the AI, the auto-manufacturer, the person in the car, the programmer or the person who has set the rules for the autonomous driving system. And if an element of the AI is self-taught, where do we go with “responsibility” then. Yet this is truly a massive emerging market with all to play for. The irony is that broadly speaking, the technology is here now and the ethical/legal/policy-making debate needs to play catch-up.
4. “Here in my car, I feel safest of all, I can lock all my doors, it’s the safest way to live”3 If we’re sitting in a car but not driving it, what are we doing? Sleeping, drinking, eating, using it as a learning lab (study for your MBA or Ph.D. on the commute), or holding a conference call or a meeting. Could it even be an automatic health diagnosis pod or relaxation pod, or some form of immersive entertainment? Suddenly an hour’s commute might be a new opportunity to open up your mind.
And what will the interior morph into? What will a designer interior look like? Will a car be a car or will it be a tractor with different sized pods attached to it depending on purpose…and will these be rented from the manufacturer or pooled municipally?
5. What would mobility-as-a-service look like? What would we be prepared to pay or be paid to own/not own a vehicle? Has the concept of “going for a drive” all but disappeared from our vocabularies given the congestion we face? Why do we choose a vehicle for the edge case (to fit in all the family and luggage for a summer holiday) when on a daily basis the car usually travels empty with only one person inside? How will business models have to change to accommodate sharing, no ownership or fractional ownership? Will cars be like the housing situation in the UK where people just can’t afford a car and attitudes begin to change to any form of ownership?
6. Who owns the data in the Black Magic Box? Who owns the data and telemetry coming from your car? The manufacturer? The insurance company? You? Google? In terms of personal privacy issues, will you accept a separate insurance black box? One of the real battles will be for who controls the interior of the car data-wise, the battle for the cockpit and the autopilot and potentially the advertising rights to your attention. Indeed the first shots have been fired, an example being the German auto consortium (Mercedes, BMW, Audi) that bought control of HERE (formerly Nokia’s Navtech SatNav maps division) in order that they weren’t dependent on Californian third party data providers. We can expect to see the telematics data wars hotting up.
7. Pedal to the metal? If the AI algorithms driving the cars are considerably better at driving than humans and the cars are increasingly predictably reliable, they won’t crash or break down - what if manufacturers self-insure and therefore car insurance is wiped out as an industry almost overnight? This has significant implications for Insurers (c.f. Aviva safe driving app campaign) who need to stay in the game.
8. Hybridization of road traffic. One real difficulty is the interim period while cars morph into something else and we have drivers on the road simultaneously with autonomous vehicles. Will public attitudes be strongly pro or against (just ask a few people about this one…people get really passionate!) Will we see a mixture of motorway road trains with a more gradual move by consumers to autonomous cars. Will we see an end to road rage with sense and sensor ability?
How far out is all this? 20-30 years? Not at all, the technology is here now and just needs to be brought into effect subject to reasonable costs. The prototypes are available, and the dumb sensors are in place (although LiDar maybe expensive), it’s just a matter of software maturing and public attitudes changing. Policymakers see big opportunities in autonomous vehicles and want to be on the leading edge of this change but will clearly need to address legal liabilities and co-existence with current drivers.
Today’s Tesla is tomorrow’s school run. Or will an Uber driverless car pick you up and take you shopping or even deliver the groceries to your door? Perhaps your own robot and AI will get out and unpack them…the question won’t be “Who’s in the driving seat?” but “What’s driving?”
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Andrew Grant is a Consulting Director at Satalia, the AI company, a Gartner Group Cool Vendor in Data Science 2016. He is a DigitalFutures consultant and recently created and directed “Retailing in The Internet of Things Age” for The Store WPP and Intel.
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(1) Paraphrased from William Gibson
(2) The Wall Street Journal, 23 December 2015. "Private car ownership is on the road to becoming a rarity," by Dan Neil
(3) Gary Numan, Cars, written by Gary Anthony James Webb, Universal Music Publishing
(4) Headline: David Bowie, Always crashing in the same car from Low, RCA Records